Week 1: An Overview of Financial Statements and the Environment of Financial Reporting - Lecture
| | Print This Page |
An Overview of Financial Statements and the Environments of Financial Reporting
What Is Accounting? | Primary Financial Statements | Classifications in a Balance Sheet | Income Statement, Statement of Retained Earnings, and Statement of Cash Flows | Ratio Analysis | The Environment of Financial Reporting and GAAP | Self-Assessment
What Is Accounting? | http://vizedhtmlcontent.next.ecollege.com/(NEXT(a619ee0a55))/Main/CourseMode/VizedHtmlView/RenderVizedHtmlView.ed?courseItemSubId=186038654&courseItemType=CourseContentItem& - top |
Do you use accounting? If you deal with money, there is a chance that you use accounting in some form. Think about when you write a check and make an entry in your check register. Then at the end of the month, you go through the check register and try to determine how much money you have spent on different things. That is accounting in its simplest form!
In a business, accounting is the process of identifying, recording, classifying, and summarizing transactions, and reporting important information about the economic activities of an entity to decision makers. The entity can be a business entity or a not-for-profit entity. Decision makers include both internal users, such as a company’s management, and external users that include investors, creditors, current stockholders, suppliers, customers, government agencies, security analysts, and the general public. The information reported is primarily the entity's economic activities that can be measured in terms of money. So while companies may not report the number of employees working in the company in their financial statements, they report the total amount of salaries and wages paid to those employees.
Do not underestimate the power of accounting! |
Accounting serves an important purpose in the economy by assisting in the optimum allocation of...